to business outcomes. There’s no shortage of
available human capital data—or the science
for HR to effectively use it—but HR itself must
undergo a transformation in order to become
a true leader in driving organization-wide
transformation. This requires HR to adopt a
data-driven approach to the following three
areas:

Establish a clear talent baseline. It’s easy
to see how our fictional concierge, Derrick,
contributes to his employer’s goal of creating
a distinctive experience for its guests. Clearly,
the hotelier did something right when it
created the role of personal concierge and
then hired people with the right mix of skill,
knowledge and personality.

HR can use talent analytics to define
specific character traits and job competencies
and then assess candidates for those traits
via personality or cognitive tests and formal
interviews. In this manner, an employer is able
to use data to help ensure they have a team of
“Derricks” pleasing customers and boosting
the bottom line.

Prioritize the human capital initiatives thatdrive the greatest business outcomes. Humancapital projects have a much broader impactthan on HR alone. Thus, it’s become necessaryto define which programs deliver the greatestreturn. Working together, the CFO and CHROcan employ data to effectively determinewhich programs are adding to the bottom lineand then prioritize accordingly.

Lead by example. HR’s role is oftenconsidered to be outward-focused—helpingthe organization acquire and develop thenecessary talent, for example.

However, it’s just as important for HR
to turn the lens inward and assess its own
function. Does it have the right strategy and
team to drive improved revenue and growth?
Using the wealth of available data, HR can
benchmark against leading organizations to
determine the effectiveness of its programs
and processes.

For two decades, HR has been clamoring for
a seat at the table. The problem is not a lack
of opportunity, but a reticence among the rest
of the senior leadership team to view HR as an
equal partner.

As the CHRO seeks to play an ever-increasing role in leading organization-wide
transformation, they must embrace a strategy
that is grounded in data and powered by
science.

For more information, visit aon.com/chro.

You’ve just come off a long overseas flight and you’re tired and hungry. Arriving at your hotel, you’re greeted by Derrick,
a personal concierge, who calls you by name
and promptly checks you in and confirms
your dinner reservation using his tablet. As he
escorts you to your room, you realize you’ve
left your toiletries and cuff links at home.

Already stressed about the next day’s meeting,you wonder aloud what you’re going to do.Fifteen minutes later, there’s a knock at thedoor. It’s Derrick, holding a bag of toiletriesand a selection of cuff links. Crisis averted, yousettle in to recharge for the next day.

As globalization, disruption, increased risk
and demographic shifts intensify business
pressures, CEOs are increasingly looking to
large-scale transformations to help achieve
organic growth. Such initiatives typically involve
the redesign of major functions, including sales,
marketing, supply chain and IT.

Granted, these are all critical for growth,
but in our fictional scenario, the single most
important element in the hotel’s ability to
deliver a distinctive customer experience is
none of these. It’s Derrick.

More than 80 percent of the changes that
drive organic growth stem from initiatives
focused on human capital, organizational
effectiveness, and compensation and incentive
redesign.

Why then is the CHRO often relegated
to a supporting role when it comes to
transformational projects? Largely it’s because
HR frequently opts to go with its “gut,”
rather than science, which is counter to the
manner in which all other business decisions
are made. A CFO wouldn’t dream of making a
critical decision about financial capital without
consulting P&L data. Yet the vast majority of
organizations fail to utilize data when making
decisions around human capital.

This is a huge missed opportunity when
you consider businesses that prioritize human
capital initiatives consistently outperform
those that don’t. Aon’s 2015 Trends in Global
Engagement report found that companies that
drive a five-point improvement in employee
engagement enjoy a three-percentage-point
improvement in revenue, while Aon 2016 “Best
Employers” drive four points more operating
margin.

Like their finance and operationscounterparts, CHROs must become adept atusing data and analytics to drive decisionsand link the value of human capital initiativesScience: The New Frontier for HRWHAT’S AHEADMichael BurkeCEO, Talent, Rewards and PerformanceAon Hewitt